Over the past two decades the use, acceptability, and availability of credit cards has increased dramatically in society. The convenience of use and credit availability have now made credit cards a necessity for many people, so much so that between 1980 and 1990 consumer credit card spending jumped from 201.2 billion dollars to almost 500 billion dollars. Mass mailings over the last decade helped put some 250 million Visa and Mastercard credit cards alone into households across the country in addition to over one billion other cards issued by other merchants.
Unfortunately the same convenience of use, acceptability and popularity of credit cards has also given birth to an army of fraudulent users who have caused significant losses due to the fraudulent and unauthorized use of credit cards. The costs of such fraudulent and unauthorized use to card holders, issuing institutions and the industry as a whole currently runs over one billion dollars every year.
Despite procedural safeguards and existing anti-fraud systems, credit card losses still continue for a variety of reasons:
1. Current anti-fraud systems provide verification of a credit card user only after a business transaction has occurred. PA1 2. Current anti-fraud systems track individuals, not accounts, and thus are subject to evasion by people falsifying their identification. PA1 3. Current systems do not track criminal activity of an individual by geography. PA1 4. Current systems do not catch multiple credit card applications by the same person under different names. Tracking is only done by a person's name and account number. PA1 5. Current systems do not catch counterfeit credit cards. PA1 6. Current systems cannot stop computer hacking or dummy accounts. PA1 7. Current systems cannot catch insider crooks.
Because of the widespread use of credit cards and the magnitude of losses caused by fraud, there is a need for an improved anti-fraud system which verifies the identity of a credit card user before a transaction takes place.
There is an additional need for a way to identify a credit card user that is not subject to evasion by a person falsifying their identification. There is a further need to catch multiple credit card applications by the same person or counterfeit cards produced by unauthorized credit card manufacturers. In addition, it is also necessary to stop computer hacking by outside parties or credit card fraud by insiders.